Oriole, In the follow
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Oriole, Incorporated decided to liquidate its wholly owned subsidiary, Tiger Corporation. Tiger had
the following tax accounting balance sheet.
Cash
Building
Land
Total
FMV
$ 400,000
100,000
300,000
$ 800,000
Adjusted tax basis
$ 400,000
20,000
180,000
$ 600,000
Appreciation
$ 80,000
120,000
$ 200,000
a. What amount of gain or loss does Tiger recognize in the complete liquidation?
b. What amount of gain or loss does Oriole recognize in the complete liquidation?
c. What is Oriole's tax basis in the building and land after the complete liquidation?
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